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Blockchain-Enabled Energy Demand Side Management Cap and Trade Model

Author

Listed:
  • Alain Aoun

    (Department of Mathematics Computer Science and Engineering, Université du Québec à Rimouski (UQAR), Rimouski, QC G5L 3A1, Canada)

  • Hussein Ibrahim

    (Technology Institute of Industrial Maintenance (ITMI), 175 Rue de la Vérendrye, Cégep de Sept-Îles, Sept-lles, QC G4R 5B7, Canada)

  • Mazen Ghandour

    (Faculty of Engineering, Lebanese University, Beirut 6573/14, Lebanon)

  • Adrian Ilinca

    (Department of Mathematics Computer Science and Engineering, Université du Québec à Rimouski (UQAR), Rimouski, QC G5L 3A1, Canada)

Abstract

Global economic growth, demographic explosion, digitization, increased mobility, and greater demand for heating and cooling due to climate change in different world areas are the main drivers for the surge in energy demand. The increase in energy demand is the basis of economic challenges for power companies alongside several socio-economic problems in communities, such as energy poverty, defined as the insufficient coverage of energy needs, especially in the residential sector. Two main strategies are considered to meet this increased demand. The first strategy focuses on new sustainable and eco-friendly modes of power generation, such as renewable energy resources and distributed energy resources. The second strategy is demand-side oriented rather than the supply side. Demand-side management, demand response (DR), and energy efficiency (EE) programs fall under this category. On the other hand, the decentralization and digitization of the energy sector convoyed by the emersion of new technologies such as blockchain, Internet of Things (IoT), and Artificial Intelligence (AI), opened the door to new solutions for the energy demand dilemma. Among these technologies, blockchain has proved itself as a decentralized trading platform between untrusted peers without the involvement of a trusted third party. This newly introduced Peer-to-Peer (P2P) trading model can be used to create a new demand load control model. In this article, the concept of an energy cap and trade demand-side management (DSM) model is introduced and simulated. The introduced DSM model is based on the concept of capping consumers’ monthly energy consumption and rewarding consumers who do not exceed this cap with energy tradeable credits that can be traded using blockchain-based Peer-to-Peer (P2P) energy trading. A model based on 200 households is used to simulate the proposed DSM model and prove that this model can be beneficial to both energy companies and consumers.

Suggested Citation

  • Alain Aoun & Hussein Ibrahim & Mazen Ghandour & Adrian Ilinca, 2021. "Blockchain-Enabled Energy Demand Side Management Cap and Trade Model," Energies, MDPI, vol. 14(24), pages 1-26, December.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:24:p:8600-:d:707064
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    References listed on IDEAS

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    1. Font Vivanco, David & Kemp, René & van der Voet, Ester, 2016. "How to deal with the rebound effect? A policy-oriented approach," Energy Policy, Elsevier, vol. 94(C), pages 114-125.
    2. Kenneth Gillingham & David Rapson & Gernot Wagner, 2016. "The Rebound Effect and Energy Efficiency Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 68-88.
    3. Eunjung Lee & Dongsik Jang & Jinho Kim, 2018. "A Two-Step Methodology for Free Rider Mitigation with an Improved Settlement Algorithm: Regression in CBL Estimation and New Incentive Payment Rule in Residential Demand Response," Energies, MDPI, vol. 11(12), pages 1-17, December.
    4. Alain Aoun & Hussein Ibrahim & Mazen Ghandour & Adrian Ilinca, 2019. "Supply Side Management vs. Demand Side Management of a Residential Microgrid Equipped with an Electric Vehicle in a Dual Tariff Scheme," Energies, MDPI, vol. 12(22), pages 1-21, November.
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    Cited by:

    1. Yan Liu & Chao Shang, 2022. "Application of Blockchain Technology in Agricultural Water Rights Trade Management," Sustainability, MDPI, vol. 14(12), pages 1-10, June.
    2. Anna Borkovcová & Miloslava Černá & Marcela Sokolová, 2022. "Blockchain in the Energy Sector—Systematic Review," Sustainability, MDPI, vol. 14(22), pages 1-12, November.

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